Two subfamilies of the Type III cGMP-inhibited cyclic nucleotide phosphodiesterase (cGI PDE) or PDE3 gene family, cGIP1 and cGIP2, have been identified. They are products of distinct but related genes. Their deduced amino acid sequences, representing proteins of 122 and 125 kDa, respectively, predict a common domain structure, including a N- terminal hydrophobic region containing several putative membrane- spanning domains, and a C-terminal region containing the catalytic domain conserved among all mammalian PDEs followed by an C-terminal hydrophilic domain. To define the role of the N-terminal hydrophobic region in membrane association of cGI PDEs, recombinants with increasing N-terminal deletions were constructed and expressed in SF9 cells. PDE activity was assayed in crude (100,000xg, 45 min) SF9 membrane fractions and cytosolic fractions. Our results suggest that the N-terminal hydrophobic region is important in the membrane association of cGI PDEs.